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Student Tips for Building Credit
How to build your credit

Student Tips for Building Credit

As a student, you are starting off with a clean slate in the credit department. How you proceed could affect the rest of your life, everything from buying a house to renting a car depends on your credit rating. Now is the best time ever to start building your credit and planning your financial future to make sure that you have every benefit possible.

It takes a lot of discipline and maturity to build a strong credit history, but if you want to be able to buy things without problems or look for a loan in the future, it is a necessary evil. Credit building may mean some major sacrifices in all areas of your life, but just think of the consequences of running up a credit card debt or not paying off your loans! Not only will you be stressed and anxious, but you won’t be able to make a big purchase for years to come.

To begin with, you should stick to just one credit card to avoid the temptation to spend too much money. Decide ahead of time, how much you can spend safely on that card and then keep track of your purchases. Some will suggest that you not even have a credit card, but for the purposes of building your credit history, you will need to use one. Look for a card that offers benefits, such as cash-back or travel points along with a low interest rate and 0 monthly fees.

Be sure to pay your full balance every month, before the cut-off date. This will all go onto your credit record and if you consistently pay off your credit card in full, your credit rating will go up. For this reason, it is very important that you manage your money well and only make a few select purchases with your card, ones that you have cash to back it with.

If for some reason, you cannot pay off the card one month, make sure you pay more than the minimum amount. You need to stop all purchases and make sure you can pay the bill completely the following month to avoid problems. If you simply don’t spend anything on the card the following month, this shouldn’t be too difficult.

Setting up a savings account as well as a checking account at your bank is another good way to build credit. Try to maintain a decent balance in both accounts and keep careful track of your checks and spending so you don’t bounce any checks. By depositing a specific amount into your savings every month, you will later have a nest egg to fall back on, plus it looks good on your record to have a steadily growing savings account.

If you have a telephone, make sure the bill is in your name and pay it off in full each month. This is a great way to turn a service into a credit builder for you, but remember that if anyone else makes calls on your phone, you are the one responsible for paying them, even if the caller doesn’t pay you back. It’s a good idea to limit the users of any utility that you are paying for.

By following these simple steps, you will slowly but surely build your credit. It can be a painstaking process, but it is all worth it in the end when you will have great credit and your fellow graduates will be swimming in debt!

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